Peter Christy

The Cloud for the Rest of the World

One of the most interesting talks at Structure 09 was by our old IBM friend Willy Chiu. We first met Willy when he did performance work related to WebSphere and then talked to him as he built their high-performance test labs to help customers with large Web applications. For the last few years he has been driving the construction and use of large Cloud labs around the world.  What Willy talked about at S09 was some of the really interesting use cases he's discovered "elsewhere" (not the  high-tech, geeky focus that dominates much of the Cloud dialog). These are really interesting. Suppose you are a country like Vietnam that wants to invest in industry development. The Cloud (and we would add wireless communication) is complete game changing. A government or economic development agency can put in a modest (by Google or Amazon comparison for sure) Cloud data center and quickly create on-demand infrastructure to use (this is analogous to the use of Amazon by startups today except startups are a very small part of the US IT economy but could be the dominating part of a development economy).  This not only provides a lot of painless infrastructure, removing from entrepreneurs the task of buying, installing, connecting and running their own computers, but also lets the government provide standard solutions or stacks further reducing the IT knowledge needed to use IT. Maybe we've all been looking in the wrong place for where the Cloud will take off. The implications are broad. If this vision is right then the issue isn't the trickiness needed to enable the construction of the next Twitter, Facebook or Wave — the focus is how to make the basics really easy to use for what we would think of as completely boring (but certainly green field) applications.

The Data Center Market Matures

Do you remember back in the dot com boom when co-location hosting facilities (high-class warehouses with good power and cooling) were touted as a high-value business? One of the interesting and differentiated offerings at that time was Equinix. They offered neither warehouse space nor vertically integrated, locked in services. Instead their ideas were: (1) network neutral (let the user choose his network services provider separately) and (2) really high-quality facilities (when it came to things like security and uptime). We recently caught up with Equinix for the first time in a number of years. They have not only managed to survive the downturn (Exodus certainly didn't) but also have demonstrated steady growth. Their model seems pretty much spot on for the base level of cloud data center infrastructure (reliable and well-connected). It's still not easy to make money in "hosting" (Ellen Hancock was just plain wrong) but rising from those ashes Equinix's business model not only pays the rent but is even capable of providing enough free cash flow the drive expansion in these uncertain financial times.